The IRS letters that went out to politically-active nonprofit groups in 2010 and kicked up a House investigation two years later have fallen out of the headlines but they just might be having an impact on this year's midterms.
Billionaire oil executives David and Charles Koch are now relying on Freedom Partners Action Fund, a new super-PAC, to run political commercials, while their nonprofit, Americans for Prosperity, has gone dark.
The shift in television ad buying occurred on Sept. 5, which was precisely 60 days from the general election and a date that triggers additional disclosure rules for nonprofits such as AFP. The group did air political advertisements within that 60-day window in 2012, funding 950 network and national cable spots in House and Senate races and 2,208 spots in the presidential, according to Kantar Media's CMAG data. Of course, that was before the Internal Revenue Service letters scrutinizing the political activity of so-called charitable groups and ensuing scandal became public.
By shifting ad spending to a super-PAC, the Kochs won't need to worry about whether the IRS decides to amend disclosure rules, impose new limits on campaign-related activities or if any of the ongoing legal battles trigger changes. "All these groups have to consider what that IRS might construe as political," said David Keating, the president of the Center for Competitive Politics, a conservative organization that is challenging campaign finance regulations.
The IRS flap was a "minor factor" in the decision to shift roles, according to a source familiar with AFP. Another driver, according to the source, was a reassessment of strategy after taking electoral losses in 2012 that included spending money earlier in the election cycle.
The move also puts the best-known Koch group further from the public eye—at least for the time-being. The Koch brothers have come under withering attacks from the left, with Senate Majority Leader Harry Reid excoriating them as "un-American" from the Senate floor while the AFL-CIO has launched a media campaign focused on "The Koch" sisters—two women who are supposed to represent a counter-point to David and Charles Koch.
Freedom Partners Action Fund began appearing on disclaimers for television spots in Arkansas, Iowa and Oregon on Sept. 5, according the CMAG data. That day AFP, which ran ads for most of this year, pulled down all of their commercials, the data shows.
The change in structure also puts new players in charge of the deepest-pocketed Republican organization ahead of the midterms and signals a distinct division of labor within the Koch-aligned network: AFP will focus on issues and grassroots organizing while Freedom Partners becomes the campaign season attack dog.
"We'll continue with a strong push through the elections," said James Davis, a spokesman for Freedom Partners Action Fund. He declined to discuss reasons for the broader change of roles within the Koch-backed network of groups. The group plans to spend about $18 million on television in Senate races.
"Into the fall, the plan was always to transition away from traditional TV, and focus more on what we do best: talking face-to-face, on the ground, in key states," said Levi Russell, an AFP spokesman. The group is also doing digital ad buys, and just launched a "six figure" online campaign in six states.
Despite the Democratic rhetoric, the new Koch-backed group isn't shaping up to be the largest spender on TV. American Crossroads and Crossroads GPS, founded in part by Karl Rove, aired more spots in the most competitive Senate races than the Koch-backed groups during September, as did the National Republican Senatorial Committee.
Democrats also bested the Koch organizations during the same month, lead by the Senate Majority PAC, Tom Steyer's NextGen Climate Action Committee and the Democratic Senatorial Campaign Committee.
When AFP's spending this year is combined with Freedom Partners television buys, the Koch-backed networks still top the Republican donor list, however. Combined, they've aired 33,025 ads since January. Only one organization has run more in that time frame: The Harry Reid-backed Senate Majority PAC.